Refund under GST is covered by Rule 89 to Rule 97 of CGST Rules, 2017. Rule 89 of the CGST Rules, pertains to application for refund in FORM GST RFD-01. According to Rule 90, where the application relates to a claim for refund from the electronic cash ledger, an acknowledgement in FORM GST RFD-02 is made available to the applicant. The application for refund is forwarded to the proper officer who, within 15 days of filing of the said application, scrutinizes the application for its completeness and an acknowledgement in FORM GST RFD-02 is made available to the applicant.
Where any deficiencies are noticed, the proper officer is supposed to communicate the deficiencies to the applicant in FORM GST RFD-03 within 15 days of filing of the said application.
The Delhi High Court in the case of Jian International vs Commissioner of Delhi Goods and Service Tax. held that GST officers have no right to find a deficiency in refund application after 15 days of filing it. The writ petition had been filed seeking a direction to respondent to grant refund claimed under Section 54 of the CGST Act, 2017 as well as the grant of interest in accordance with Section 56 of CGST Act.
Petitioner states that despite the period of 15 days from the date of filing of the refund application having expired, the respondent has till date neither pointed out any deficiency/discrepancy in FORM GST RFD-03 nor it has issued any acknowledgement in FORM GST RFD-02.
HC found that Rules 90 and 91 of the CGST Rules provide a complete code with regard to acknowledgement, scrutiny and grant of refund. The said Rules also provide a strict time line for carrying out the aforesaid activities.
To allow the respondent to issue a deficiency memo today would amount to enabling the Respondent to process the refund application beyond the statutory timelines as provided under Rule 90.
This could also be construed as rejection of the petitioner’s initial application for refund. This would not only delay the petitioner’s right to seek refund, but also impair petitioner’s right to claim interest from the relevant date of filing of the original application for refund as provided under the Rules.
Consequently, High Court was of the view that the respondent had lost the right to point out any deficiency, in the petitioner’s refund application, at this belated stage. Accordingly, the Court directed the respondent to pay to the petitioner the refund along with interest in accordance with law within two weeks.